Exhibit 99
tennantovallogoa20.jpgtennantovallogoa20.jpg

INVESTOR CONTACT:
 
MEDIA CONTACT:
Tom Paulson
 
Kathryn Lovik
Senior Vice President and Chief Financial Officer
 
Global Communications Director
tom.paulson@tennantco.com
 
kathryn.lovik@tennantco.com
763-540-1204
 
763-540-1212
Tennant Company Reports 2018 Third-Quarter Results

Net sales of $273.3 million in the third quarter, up 4.3 percent

Organic sales rose 6.1 percent, led by the Americas and Asia-Pacific regions

Third-quarter GAAP diluted earnings per share of $0.52;
Adjusted EPS excluding special items of $0.54

Adjusted EBITDA of $29.3 million, or 10.7 percent of sales

Company increases and narrows 2018 full-year guidance ranges for net sales,
adjusted net earnings and adjusted EBITDA
MINNEAPOLIS, October 24, 2018-Tennant Company (“Tennant”) (NYSE: TNC), a world leader in designing, manufacturing and marketing of solutions that help create a cleaner, safer, healthier world, today reported net sales of $273.3 million and net earnings of $9.7 million, or $0.52 per diluted share and adjusted net earnings of $0.54 per diluted share, for the quarter ended September 30, 2018. The 2018 third-quarter reported results reflected the impact of non-operational items that reduced net earnings by $0.4 million, or $0.02 per diluted share. Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) in the 2018 third quarter rose to $29.3 million, or 10.7 percent of sales, from $28.0 million, or 10.7 percent of sales, in the same quarter last year. (See the Supplemental Non-GAAP Financial Table.)
“We remain pleased with our ability to generate broad-based growth across our geographies, products and channels, improving efficiencies in our business and continuing to invest for the future,” said Chris Killingstad, Tennant Company's president and chief executive officer. “While gross margin performance in the period reflected factors affecting U.S.-based manufacturers, such as labor and raw material shortages, tariffs and higher freight costs, we did continue to improve our field-service utilization and manufacturing productivity. We also made efficient use of our expense structure and continue to generate strong cash flow. We are pleased with our progress to date and are confident in the underlying performance of the business.”

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Page 2 – Tennant Company Reports 2018 Third Quarter Results

Third-Quarter Operating Review
Tennant’s 2018 third-quarter consolidated net sales of $273.3 million grew approximately 4.3 percent over the same period last year. This includes a 1.7 percent reduction from foreign currency and an organic growth of 6.1 percent.
Sales in the Americas region improved 8.9 percent, or 10.6 percent organically, reflecting strength in both our North and Latin American regions. North America showed considerable organic growth at 11.1 percent during the quarter driven by strength in our strategic account and distribution channels, along with continued growth in our service and parts and consumables businesses. Sales in the Americas region also reflect 6.4 percent organic growth in the Latin American region led by continued growth in our Brazilian market. Sales in the Europe, Middle East and Africa (EMEA) region were 5.8 percent lower, or down 4.5 percent organically, reflecting a challenging comparable sales performance from 2017 third quarter of 14.6 percent organic growth. Sales in the Asia Pacific (APAC) region rose 7.4 percent, or 10.6 percent organically, primarily led by industrial product growth in China.
Gross margin in the 2018 third quarter was 39.6 percent, compared to 39.9 percent in the same period last year. The prior year gross margin rate included a $2.2 million acquisition-related charge. Excluding the charge, the prior year gross margin rate was 40.8 percent. The year-over-year decline reflects the continued robust growth in our strategic account channel, higher freight costs, manufacturing productivity issues associated with raw material and labor shortages and the impact from newly enacted tariffs. These factors were partially offset by improved operational performance in both manufacturing and service that are the result of Tennant’s operational efficiency strategies. The company remains intently focused on gross margin expansion and is continually identifying cost savings initiatives in order to address external challenges impacting gross margin rates.
Selling and administrative (S&A) expense in the 2018 third quarter was $85.1 million, or 31.2 percent of sales, compared to $85.7 million, or 32.7 percent of sales, a year ago. Tennant continues to balance efficiency with investments toward growth. S&A in the third quarters of 2018 and 2017 reflected non-operational items that, on a net basis, increased S&A expenses by $0.8 million and $0.9 million, respectively. In addition, the third quarter of 2018 included a non-cash amortization expense related to the IPC acquisition of $5.4 million, or 2.0 percent of sales, compared to $7.3 million, or 2.8 percent of sales, in last year’s third quarter. The company remains committed to delivering expense leverage in order to expand profit margins.
Tennant’s 2018 third-quarter net earnings were $9.7 million, compared to net earnings of $3.6 million in the 2017 third quarter. Excluding the non-operational items, the 2018 third-quarter net earnings were $10.0 million, compared to $5.8 million in the 2017 third quarter. (See the Supplemental Non-GAAP Financial Table.)

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Page 3 – Tennant Company Reports 2018 Third Quarter Results

2018 Business Outlook
Killingstad concluded, “We remain focused on two goals: driving sustainable growth and improving our operational efficiencies. This year continues to present headwinds in the forms of a tight labor market, increased freight costs and tariff-related impacts. However, we are pleased thus far with our ability to execute, in spite of these challenges, and to maintain our momentum, which gives us confidence to increase our previously announced full-year guidance ranges for net sales, adjusted net EPS and adjusted EBITDA.”
Tennant is increasing and narrowing its previously announced 2018 full-year revenue guidance to be in the range of $1.115 billion to $1.125 billion, up 11.2 percent to 12.2 percent compared to the prior year and reflecting organic growth of approximately 5 percent. Based on the anticipated higher level of sales, continued tight management of controllable expenses, and impact of lower-than-expected tax rates, Tennant is increasing the low and high end of adjusted earnings per share to a range of $2.05 to $2.15. The company also is confirming the 2018 full-year reported GAAP earnings to a range of $1.75 to $1.85 per share and increasing adjusted EBITDA to a range of $119 million to $122 million.
Tennant's 2018 annual financial outlook includes the following additional assumptions:
Strong growth in most regions, especially strategic accounts in North America;
Gross margin performance of approximately 40.5 percent;
R&D expense of approximately 3.0 percent of sales;
Capital expenditures of approximately $20 million; and
An effective tax rate of approximately 15 percent.
Conference Call
Tennant will host a conference call to discuss 2018 third-quarter results, October 24, 2018, at 10 a.m. Central Time (11 a.m. Eastern Time). The conference call and accompanying slides will be available via webcast on Tennant's investor website. To listen to the call live and view the slide presentation, go to investors.tennantco.com and click on the link at the bottom of the home page. A taped replay of the conference call, with slides, will be available at investors.tennantco.com until November 24, 2018.

Company Profile
Founded in 1870, Tennant Company (TNC), headquartered in Minneapolis, Minnesota, is a world leader in designing, manufacturing and marketing solutions that empower customers to achieve quality cleaning performance, reduce their environmental impact and help create a cleaner, safer, healthier world. Its products include equipment for maintaining surfaces in industrial, commercial and outdoor environments; detergent-free and other sustainable cleaning technologies; cleaning tools and supplies; and coatings for protecting, repairing and upgrading surfaces. Tennant's global field service network is the most extensive in the industry. Tennant Company had sales of $1.0 billion in 2017 and has approximately 4,300 employees. Tennant has manufacturing operations throughout the world; and sells products directly in 15 countries and through distributors in more than 100 countries. For more information, visit www.tennantco.com and www.ipcworldwide.com. The Tennant Company logo and other trademarks designated with the symbol “®” are trademarks of Tennant Company registered in the United States and/or other countries.

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Page 4 – Tennant Company Reports 2018 Third Quarter Results

Forward-Looking Statements
Certain statements contained in this document, as well as other written and oral statements made by us from time to time, are considered “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act. These statements do not relate to strictly historical or current facts and provide current expectations or forecasts of future events. Any such expectations or forecasts of future events are subject to a variety of factors. These include factors that affect all businesses operating in a global market as well as matters specific to us and the markets we serve. Particular risks and uncertainties presently facing us include: our ability to effectively manage organizational changes; our ability to attract, retain and develop key personnel and create effective succession planning strategies; the competition in our business; fluctuations in the cost, quality or availability of raw materials and purchased components; our ability to successfully upgrade and evolve our information technology systems; our ability to develop and commercialize new innovative products and services; our ability to integrate acquisitions, including IPC; our ability to generate sufficient cash to satisfy our debt obligations; geopolitical and economic uncertainty throughout the world; our ability to successfully protect our information technology systems from cybersecurity risks; the occurrence of a significant business interruption; our ability to comply with laws and regulations; the potential disruption of our business from actions of activist investors or others; the relative strength of the U.S. dollar, which affects the cost of our materials and products purchased and sold internationally; unforeseen product liability claims or product quality issues; and our internal control over financial reporting risks resulting from our acquisition of IPC.
We caution that forward-looking statements must be considered carefully and that actual results may differ in material ways due to risks and uncertainties both known and unknown. Information about factors that could materially affect our results can be found in our 2017 Form 10-K or 2017 Form 10-Qs. Shareholders, potential investors and other readers are urged to consider these factors in evaluating forward-looking statements and are cautioned not to place undue reliance on such forward-looking statements.
We undertake no obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise, except as required by law. Investors are advised to consult any further disclosures by us in our filings with the Securities and Exchange Commission and in other written statements on related subjects. It is not possible to anticipate or foresee all risk factors, and investors should not consider any list of such factors to be an exhaustive or complete list of all risks or uncertainties.

Non-GAAP Financial Measures
This news release and the related conference call include presentation of non-GAAP measures that include or exclude special items. Management believes that the non-GAAP measures provide useful information to investors regarding the company’s results of operations and financial condition because they permit a more meaningful comparison and understanding of Tennant Company’s operating performance for the current, past or future periods. Management uses these non-GAAP measures to monitor and evaluate ongoing operating results and trends, and to gain an understanding of the comparative operating performance of the company.

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Page 5 – Tennant Company Reports 2018 Third Quarter Results

We believe that disclosing Selling and Administrative Expense - as adjusted, Profit from Operations - as adjusted, Operating Margin - as adjusted, Profit Before Income Taxes - as adjusted, Income Tax Expense - as adjusted, Net Earnings Attributable to Tennant Company - as adjusted and Net Earnings Attributable to Tennant Company per Share - as adjusted (collectively, the “Non-GAAP Measures”), excluding the impacts from restructuring charge, acquisition costs, certain non-operational professional services and debt financing costs write-off, are useful to investors as a measure of operating performance. We use these as one measure to monitor and evaluate operating performance. The non-GAAP measures are financial measures that do not reflect United States Generally Accepted Accounting Principles (GAAP). We calculate Selling and Administrative Expense - as adjusted, Profit from Operations - as adjusted, Operating Margin - as adjusted and Profit Before Income Taxes - as adjusted by adding back the pre-tax effect of the restructuring charge, acquisition costs and certain non-operational professional services. We calculate Income Tax Expense - as adjusted by adding back the tax effect of the restructuring charge, acquisition costs, certain non-operational professional services and debt financing costs write-off. We calculate Net Earnings Attributable to Tennant Company - as adjusted by adding back the after-tax effect of the restructuring charge, acquisition costs, certain non-operational professional services and debt financing costs write-off. We calculate Net Earnings Attributable to Tennant Company per Share - as adjusted by adding back the after-tax effect of the restructuring charge, acquisition costs, certain non-operational professional services, debt financing costs write-off and dividing the result by the diluted weighted average shares outstanding.
We believe that disclosing Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) and EBITDA Margin, excluding the impact from restructuring charge, acquisition costs, certain non-operational professional services and debt financing costs write-off (EBITDA - as adjusted) and EBITDA margin - as adjusted, is useful to investors as a measure of operating performance. We use these measures to monitor and evaluate operating performance. EBITDA - as adjusted and EBITDA Margin - as adjusted are financial measures that do not reflect GAAP. We calculate EBITDA - as adjusted by adding back the pre-tax effect of the restructuring charge, acquisition costs, certain non-operating professional services, debt financing costs write-off, Interest Income, Interest Expense, Income Tax Expense, Depreciation Expense and Amortization Expense to Net Earnings (Loss) - as reported. We calculate EBITDA Margin - as adjusted by dividing EBITDA - as adjusted by Net Sales.
Investors should consider these non-GAAP financial measures in addition to, not as a substitute for, or better than, financial measures prepared in accordance with GAAP. Reconciliations of the components of these measures to the most directly comparable GAAP financial measures are included in the Supplemental Non-GAAP Financial Table to this earnings release.

FINANCIAL TABLES FOLLOW


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Page 6 – Tennant Company Reports 2018 Third Quarter Results

TENNANT COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
(In thousands, except shares and per share data)
 
Three Months Ended
 
Nine Months Ended
 
 
September 30
 
September 30
 
 
2018
 
2017
 
2018
 
2017
Net Sales
 
$
273,255

 
$
261,921

 
$
838,299

 
$
723,771

Cost of Sales
 
165,170

 
157,317

 
500,778

 
434,877

Gross Profit
 
108,085

 
104,604

 
337,521

 
288,894

Gross Margin
 
39.6
%
 
39.9
%
 
40.3
%
 
39.9
%
Operating Expense:
 
 
 
 
 
 
 
 
Research and Development Expense
 
7,506

 
7,907

 
23,408

 
24,239

Selling and Administrative Expense
 
85,140

 
85,711

 
269,273

 
246,993

Total Operating Expense
 
92,646

 
93,618

 
292,681

 
271,232

Profit from Operations
 
15,439

 
10,986

 
44,840

 
17,662

Operating Margin
 
5.7
%
 
4.2
%
 
5.3
%
 
2.4
%
Other Income (Expense):
 
 
 
 
 
 
 
 
Interest Income
 
839

 
698

 
2,540

 
1,575

Interest Expense
 
(5,986
)
 
(6,093
)
 
(17,736
)
 
(18,720
)
Net Foreign Currency Transaction Losses
 
(295
)
 
(842
)
 
(1,381
)
 
(2,375
)
Other Expense, Net
 
(130
)
 
(422
)
 
(890
)
 
(774
)
Total Other Expense, Net
 
(5,572
)
 
(6,659
)
 
(17,467
)
 
(20,294
)
Profit (Loss) Before Income Taxes
 
9,867

 
4,327

 
27,373

 
(2,632
)
Income Tax Expense
 
158

 
731

 
1,598

 
385

Net Earnings (Loss) Including Noncontrolling Interest
 
9,709

 
3,596

 
25,775

 
(3,017
)
Net Earnings (Loss) Attributable to Noncontrolling Interest
 
33

 
37

 
81

 
(28
)
Net Earnings (Loss) Attributable to Tennant Company
 
$
9,676

 
$
3,559

 
$
25,694

 
$
(2,989
)
 
 
 
 
 
 
 
 
 
Net Earnings (Loss) Attributable to Tennant Company per Share:
 
 
 
 
 
 
 
 
Basic
 
$
0.54

 
$
0.20

 
$
1.43

 
$
(0.17
)
Diluted
 
$
0.52

 
$
0.20

 
$
1.40

 
$
(0.17
)
 
 
 
 
 
 
 
 
 
Weighted Average Shares Outstanding:
 
 
 
 
 
 
 
 
Basic
 
17,998,917

 
17,729,857

 
17,911,880

 
17,673,656

Diluted
 
18,439,621

 
18,171,444

 
18,344,813

 
17,673,656

 
 
 
 
 
 
 
 
 
Cash Dividends Declared per Common Share
 
$
0.21

 
$
0.21

 
$
0.63

 
$
0.63


GEOGRAPHICAL NET SALES(1) (Unaudited)
(In thousands)
 
Three Months Ended
 
Nine Months Ended
 
 
September 30
 
September 30
 
 
2018
 
2017
 
%
 
2018
 
2017
 
%
Americas
 
$
175,341

 
$
161,037

 
8.9
 
$
516,731

 
$
472,953

 
9.3
Europe, Middle East and Africa
 
74,254

 
78,851

 
(5.8)
 
250,480

 
189,483

 
32.2
Asia Pacific
 
23,660

 
22,033

 
7.4
 
71,088

 
61,335

 
15.9
Total
 
$
273,255

 
$
261,921

 
4.3
 
$
838,299

 
$
723,771

 
15.8
(1) Net of intercompany sales.

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Page 7 – Tennant Company Reports 2018 Third Quarter Results

TENNANT COMPANY
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)
(In thousands)
September 30,
 
December 31,
 
2018
 
2017
ASSETS
 
 
 
Current Assets:
 
 
 
Cash and Cash Equivalents
$
53,473

 
$
58,398

Restricted Cash
534

 
653

Net Receivables
208,119

 
209,516

Inventories
139,793

 
127,694

Prepaid Expenses
28,356

 
19,351

Other Current Assets
8,865

 
7,503

Total Current Assets
439,140

 
423,115

Property, Plant and Equipment
381,443

 
382,768

Accumulated Depreciation
(217,625
)
 
(202,750
)
Property, Plant and Equipment, Net
163,818

 
180,018

Deferred Income Taxes
15,062

 
11,134

Goodwill
184,619

 
186,044

Intangible Assets, Net
152,974

 
172,347

Other Assets
14,953

 
21,319

Total Assets
$
970,566

 
$
993,977

 
 
 
 
LIABILITIES AND TOTAL EQUITY
 
 
 
Current Liabilities:
 
 
 
Current Portion of Long-Term Debt
$
30,999

 
$
30,883

Accounts Payable
90,778

 
96,082

Employee Compensation and Benefits
42,157

 
37,257

Income Taxes Payable
2,972

 
2,838

Other Current Liabilities
71,842

 
69,447

Total Current Liabilities
238,748

 
236,507

Long-Term Liabilities:
 
 
 
Long-Term Debt
316,937

 
345,956

Employee-Related Benefits
21,828

 
23,867

Deferred Income Taxes
48,491

 
53,225

Other Liabilities
35,479

 
35,948

Total Long-Term Liabilities
422,735

 
458,996

Total Liabilities
661,483

 
695,503

Equity:
 
 
 
Common Stock
6,796

 
6,705

Additional Paid-In Capital
26,087

 
15,089

Retained Earnings
312,539

 
297,032

Accumulated Other Comprehensive Loss
(38,233
)
 
(22,323
)
Total Tennant Company Shareholders’ Equity
307,189

 
296,503

Noncontrolling Interest
1,894

 
1,971

Total Equity
309,083

 
298,474

Total Liabilities and Total Equity
$
970,566

 
$
993,977


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Page 8 – Tennant Company Reports 2018 Third Quarter Results

TENNANT COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
(In thousands)
Nine Months Ended
 
September 30
 
2018
 
2017
OPERATING ACTIVITIES
 
 
 
Net Earnings (Loss) Including Noncontrolling Interest
$
25,775

 
$
(3,017
)
Adjustments to reconcile Net Earnings (Loss) to Net Cash Provided by Operating Activities:
 
 
 
Depreciation
24,090

 
18,515

Amortization of Intangible Assets
17,378

 
11,430

Amortization of Debt Issuance Costs
1,883

 
896

Debt Issuance Cost Charges Related to Short-Term Financing

 
6,200

Fair Value Step-Up Adjustment to Acquired Inventory

 
8,445

Deferred Income Taxes
(9,908
)
 
(4,848
)
Share-Based Compensation Expense
6,008

 
4,915

Allowance for Doubtful Accounts and Returns
835

 
983

Other, Net
(459
)
 
175

Changes in Operating Assets and Liabilities, Net of Assets Acquired:
 
 
 
Receivables, Net
(342
)
 
(524
)
Inventories
(19,550
)
 
(9,866
)
Accounts Payable
(1,756
)
 
5,747

Employee Compensation and Benefits
5,186

 
(9,462
)
Other Current Liabilities
(138
)
 
10,019

Income Taxes
(1,105
)
 
4,149

Other Assets and Liabilities
(4,428
)
 
(11,634
)
Net Cash Provided by Operating Activities
43,469

 
32,123

 
 
 
 
INVESTING ACTIVITIES
 
 
 
Purchases of Property, Plant and Equipment
(12,768
)
 
(16,239
)
Proceeds from Disposals of Property, Plant and Equipment
108

 
2,456

Proceeds from Principal Payments Received on Long-Term Note Receivable
828

 
500

Issuance of Long-Term Note Receivable

 
(1,500
)
Proceeds from Sale of Business
4,000

 

Acquisition of Business, Net of Cash, Cash Equivalents and Restricted Cash Acquired

 
(353,535
)
Purchase of Intangible Assets
(2,607
)
 
(2,500
)
Net Cash Used in Investing Activities
(10,439
)
 
(370,818
)
 
 
 
 
FINANCING ACTIVITIES
 
 
 
Proceeds from Short-Term Debt

 
300,000

Repayments of Short-Term Debt

 
(300,000
)
Proceeds from Issuance of Long-Term Debt

 
440,000

Payments of Long-Term Debt
(30,216
)
 
(81,262
)
Payments of Debt Issuance Costs

 
(16,465
)
Change in Capital Lease Obligations
7

 

Proceeds from Issuances of Common Stock
5,735

 
4,728

Dividends Paid
(11,356
)
 
(11,204
)
Net Cash (Used in) Provided by Financing Activities
(35,830
)
 
335,797


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Page 9 – Tennant Company Reports 2018 Third Quarter Results

 
 
 
 
Effect of Exchange Rate Changes on Cash, Cash Equivalents and Restricted Cash
(2,244
)
 
1,587

 
 
 
 
Net Decrease in Cash, Cash Equivalents and Restricted Cash
(5,044
)
 
(1,311
)
 
 
 
 
Cash, Cash Equivalents and Restricted Cash at Beginning of Period
59,051

 
58,550

 
 
 
 
Cash, Cash Equivalents and Restricted Cash at End of Period
$
54,007

 
$
57,239



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Page 10 – Tennant Company Reports 2018 Third Quarter Results

TENNANT COMPANY
SUPPLEMENTAL NON-GAAP FINANCIAL TABLE
(In thousands, except per share data)
 
Three Months Ended
 
Nine Months Ended
 
 
September 30
 
September 30
 
 
2018
 
2017
 
2018
 
2017
 
 
 
 
 
 
 
 
 
Gross Profit - as reported
 
$
108,085

 
$
104,604

 
$
337,521

 
$
288,894

Gross Margin - as reported
 
39.6
%
 
39.9
%
 
40.3
%
 
39.9
%
Adjustments:
 
 
 
 
 
 
 
 
Inventory Step-Up
 

 
2,246

 

 
8,445

Gross Profit - as adjusted
 
$
108,085

 
$
106,850

 
$
337,521

 
$
297,339

Gross Margin - as adjusted
 
39.6
%
 
40.8
%
 
40.3
%
 
41.1
%
 
 
 
 
 
 
 
 
 
Selling and Administrative Expense - as reported
 
$
85,140

 
$
85,711

 
$
269,273

 
$
246,993

Selling and Administrative Expense as a percent of Net Sales - as reported
 
31.2
%
 
32.7
%
 
32.1
%
 
34.1
%
Adjustments:
 
 
 
 
 
 
 
 
Acquisition and Integration Costs
 
(1,530
)
 
(885
)
 
(5,345
)
 
(8,443
)
Gain on Sale of Business
 
955

 

 
955

 

Professional Services
 
(236
)
 

 
(1,792
)
 

Restructuring Charge
 

 

 

 
(8,018
)
Pension Settlement
 

 

 

 
(205
)
Selling and Administrative Expense - as adjusted
 
$
84,329

 
$
84,826

 
$
263,091

 
$
230,327

Selling and Administrative Expense as a percent of Net Sales - as adjusted
 
30.9
%
 
32.4
%
 
31.4
%
 
31.8
%
 
 
 
 
 
 
 
 
 
Profit from Operations - as reported
 
$
15,439

 
$
10,986

 
$
44,840

 
$
17,662

Operating Margin - as reported
 
5.7
%
 
4.2
%
 
5.3
%
 
2.4
%
Adjustments:
 
 
 
 
 
 
 
 
Acquisition and Integration Costs
 
1,530

 
885

 
5,345

 
8,443

Gain on Sale of Business
 
(955
)
 

 
(955
)
 

Professional Services
 
236

 

 
1,792

 

Inventory Step-Up
 

 
2,246

 

 
8,445

Restructuring Charge
 

 

 

 
8,018

Pension Settlement
 

 

 

 
205

Profit from Operations - as adjusted
 
$
16,250

 
$
14,117

 
$
51,022

 
$
42,773

Operating Margin - as adjusted
 
5.9
%
 
5.4
%
 
6.1
%
 
5.9
%
 
 
 
 
 
 
 
 
 
Profit (Loss) Before Income Taxes - as reported
 
$
9,867

 
$
4,327

 
$
27,373

 
$
(2,632
)
Adjustments:
 
 
 
 
 
 
 
 
Acquisition and Integration Costs
 
1,530

 
885

 
5,345

 
8,443

Gain on Sale of Business
 
(955
)
 

 
(955
)
 

Professional Services
 
236

 

 
1,792

 

Inventory Step-Up
 

 
2,246

 

 
8,445

Restructuring Charge
 

 

 

 
8,018

Financing Costs
 

 

 

 
7,378

Pension Settlement
 

 

 

 
205

Profit Before Income Taxes - as adjusted
 
$
10,678

 
$
7,458

 
$
33,555

 
$
29,857




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Page 11 – Tennant Company Reports 2018 Third Quarter Results

TENNANT COMPANY
SUPPLEMENTAL NON-GAAP FINANCIAL TABLE
(In thousands, except per share data)
 
Three Months Ended
 
Nine Months Ended
 
 
September 30
 
September 30
 
 
2018
 
2017
 
2018
 
2017
 
 
 
 
 
 
 
 
 
Income Tax Expense - as reported
 
$
158

 
$
731

 
$
1,598

 
$
385

Adjustments:
 
 
 
 
 
 
 
 
Tax Rate Legislation and Mandatory Repatriation
 
362

 

 
362

 

Acquisition and Integration Costs(1)(2)
 
253

 
263

 
1,170

 
263

Gain on Sale of Business
 
(234
)
 
 
 
(234
)
 

Professional Services(1)
 
57

 

 
439

 

Inventory Step-Up(1)
 

 
627

 

 
2,356

Financing Costs(1)
 

 

 

 
2,759

Restructuring Charge(1)
 

 

 

 
2,234

Pension Settlement(1)
 

 

 

 
47

Income Tax Expense - as adjusted
 
$
596

 
$
1,621

 
$
3,335

 
$
8,044

 
 
 
 
 
 
 
 
 
Net Earnings (Loss) Attributable to Tennant Company - as reported
 
$
9,676

 
$
3,559

 
$
25,694

 
$
(2,989
)
Adjustments:
 
 
 
 
 
 
 
 
Tax Rate Legislation and Mandatory Repatriation
 
(362
)
 

 
(362
)
 

Acquisition and Integration Costs
 
1,277

 
622

 
4,175

 
8,180

Gain on Sale of Business
 
(721
)
 

 
(721
)
 

Professional Services
 
179

 

 
1,353

 

Inventory Step-Up
 

 
1,619

 

 
6,089

Restructuring Charge
 

 

 

 
5,784

Financing Costs
 

 

 

 
4,619

Pension Settlement
 

 

 

 
158

Net Earnings Attributable to Tennant Company - as adjusted
 
$
10,049

 
$
5,800

 
$
30,139

 
$
21,841

 
 
 
 
 
 
 
 
 
Net Earnings (Loss) Attributable to Tennant Company per Share - as reported:
 
 
 
 
 
 
 
 
Diluted
 
$
0.52

 
$
0.20

 
$
1.40

 
$
(0.17
)
Adjustments:
 
 
 
 
 
 
 
 
Tax Rate Legislation and Mandatory Repatriation
 
(0.02
)
 

 
(0.02
)
 

Acquisition and Integration Costs
 
0.07

 
0.03

 
0.23

 
0.47

Gain on Sale of Business
 
(0.04
)
 

 
(0.04
)
 

Professional Services
 
0.01

 

 
0.07

 

Inventory Step-Up
 

 
0.09

 

 
0.34

Restructuring Charge
 

 

 

 
0.32

Financing Costs
 

 

 

 
0.26

Pension Settlement
 

 
 
 

 
0.01

Adjustment from Impact of Using Diluted Shares
 

 

 

 
(0.03
)
Net Earnings Attributable to Tennant Company per Share - as adjusted
 
$
0.54

 
$
0.32

 
$
1.64

 
$
1.20

(1) 
In determining the tax impact, we applied the statutory rate in effect for each jurisdiction where expenses were incurred and deductible for tax purposes.

(2) 
2017 Acquisition Costs were nondeductible for tax purposes.

(more)




Page 12 – Tennant Company Reports 2018 Third Quarter Results

TENNANT COMPANY
SUPPLEMENTAL NON-GAAP FINANCIAL TABLE
(In thousands, except per share data)
 
Three Months Ended
 
Nine Months Ended
 
 
September 30
 
September 30
 
 
2018
 
2017
 
2018
 
2017
 
 
 
 
 
 
 
 
 
Net Earnings (Loss) Including Noncontrolling Interest - as reported
 
$
9,709

 
$
3,596

 
$
25,775

 
$
(3,017
)
Adjustments:
 
 
 
 
 
 
 
 
Interest Income
 
(839
)
 
(698
)
 
(2,540
)
 
(1,575
)
Interest Expense
 
5,986

 
6,093

 
17,736

 
18,720

Income Tax Expense
 
158

 
731

 
1,598

 
385

Depreciation Expense
 
7,750

 
7,472

 
24,090

 
18,515

Amortization Expense
 
5,721

 
7,650

 
17,378

 
11,430

Acquisition and Integration Costs
 
1,530

 
885

 
5,345

 
8,443

Gain on Sale of Business
 
(955
)
 

 
(955
)
 

Professional Services
 
236

 

 
1,792

 

Inventory Step-Up
 

 
2,246

 

 
8,445

Restructuring Charge
 

 

 

 
8,018

Pension Settlement
 

 

 

 
205

Acquisition Related Currency Loss
 

 

 

 
1,178

Earnings Before Interest, Taxes, Depreciation & Amortization - as adjusted
 
$
29,296

 
$
27,975

 
$
90,219

 
$
70,747

EBITDA Margin - as adjusted
 
10.7
%
 
10.7
%
 
10.8
%
 
9.8
%


###

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